AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2016 (1) TMI 567
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.... such tax from the payments made to them. 3. The assessee and his authorized representative appeared before the AO on 21-12-2010 and agreed for the addition of Rs. 43,76,025/- for non deduction of tax at source on payment to sub contractors. In view of the above and applying the provisions of section 40(a)(ia) the AO disallowed an amount of Rs. 43,76,025/- to the total income of the assessee. 4. Before CIT(A) it was submitted that the outstanding creditors as on 31-03-2008 is Rs. 22,92,025/-. Further, out of the total payments made to the sub contractors at Rs. 43,76,025/-, as extracted by the AO in the assessment order, only an amount of Rs. 17,75,165/- was outstanding as on 31-03-2008. It was further submitted that if the outstanding payments to sub contractors as on 31-03-2007 and 31-03-2008 are compared, then an amount of Rs. 5,10,084/- pertains to the creditors outstanding as on 31-03-2007. Therefore, the net creditors outstanding as on 31-03- 2008 was only to the extent of Rs. 12,65,081/-. Relying on various decisions it was submitted that provision of section 40(a)(ia) of the Act is attracted only to the expenditure which is payable at the end of the year. Therefore, the d....
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.... addition in appeal as by agreeing the said addition the assessee preempted the AO from conducting further enquiries in this regard. For the above proposition, he relied on the decision of Hon'ble Bombay High Court in the case of Rameshchandra and Company Vs. CIT reported in 168 ITR 375, the decision of Hon'ble Madras High Court in the case of Ramanlal Kamdar Vs. CIT reported in 108 ITR 73 and the decision of Hon'ble Kerala High Court in the case of Mahesh B. Shah Vs. ACIT and another reported in 238 ITR 130. He accordingly upheld the addition made by the AO u/s.40(a)(ia) of the I.T. Act. 8. Aggrieved with such order of the CIT(A) the assessee is in appeal before us with the following grounds : "1. The Ld.CIT(A) erred in law and on facts in confirming disallowance of Rs. 43,76,025/- being the payment to sub-contractors by provisions of sec.40(a)(ia) of the I.T. Act, 1961. 2. Without prejudice to the above, the Ld.CIT(A) erred in law and on facts in not appreciating that provision of section 40(a)(ia) is attracted only in respect of payments which is actually payable as at the end of the year and not which is paid during the year. 3. The Ld.CIT(A) has further erred in law and....
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....rdance with that statement. If he could have no grievance he could file no appeal. 13. Similarly, in the case of Ramanlal Kamdar (Supra) in the original assessment for A.Yrs 2002-03 and 2003-04 a mistake had crept in while working out interest u/s.139(1)(iii). Thereafter the AO issued a notice to the assessee proposing to rectify the mistake u/s.154 and calling upon the objections of the assessee. The mistake was that instead of treating the assessee as unregistered firm for the purpose of calculating the interest the AO had treated it as a registered firm. One of the partners of the firm appeared before the AO and stated that he had no objection to the proposed revision. Accordingly, the AO passed the order u/s.154. The assessee preferred an appeal before the AAC who dismissed the appeal. On further appeal by the assessee the Tribunal also dismissed the appeal. Under these circumstances the Hon'ble High Court held that the appeals to the AAC and ITAT were incompetent. 14. Similarly, in the case of Mahesh B. Shah and Another (Supra) the assessee as a Member of Cochin Stock Exchange made contributions to the stock exchange funds. This amount though claimed by the assessee as a rev....
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....ore the Ld.CIT(A). He accordingly submitted that the grounds raised by the assessee be dismissed. 16. We have considered the rival arguments made by both the sides, perused the orders of the AO and CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the AO in the instant case made addition of Rs. 43,76,025/- u/s.40(a)(ia) on the ground that assessee has not deducted tax on the payments made to the sub-contractors as the amount of payment exceeded Rs. 20,000/- on each and every instance and further the assessee also admitted before him for addition of the same u/s.40(a)(ia). 17. We find before the CIT(A) the assessee made 2 fold arguments. The first limb of the argument is that the disallowance u/s.40(a)(ia) should not exceed the amount of outstanding as at the end of the year which in the instant case is Rs. 12,65,081/-. The same has been arrived at by the assessee after excluding the amount of Rs. 5,10,084/- pertaining to the creditors outstanding as on 31-03-2007 from the total outstanding creditors of Rs. 17,75,165/- as on 31-03-2008. 18. The second limb of the argument is that the sub-contractors h....
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.... to report the result of the same to him. Sub section (5) of section 250 of the Act empowers the Appellate Assistant Commissioner to allow the appellant, at the hearing of the appeal, to go into any ground of appeal not specified in the grounds of appeal, on his being satisfied that the omission of the ground from the form of appeal was not wilful. It is clear from the above provisions that the powers of the Appellate Assistant Commissioner are much wider than the powers of an ordinary court of appeal. The scope of his powers is coterminous with that of the Income tax Officer. He can do what the Income tax Officer can do. He can also direct the Income tax Officer to do what he failed to do. The power conferred on the Appellate Assistant Commissioner under sub section (4) of section 250 being a quasi judicial power, it is incumbent on him to exercise the same if the facts and circumstances justify. If the Appellate Assistant Commissioner fails to exercise his discretion judicially, and arbitrarily refuses to make enquiry in a case where the facts and circumstances so demand, his action would be open for correction by a higher authority." 21. Respectfully following the above decisio....
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....mental error of law on the part of the assessee, but that error of law once detected by the petitioner, it was urged before the Commissioner of Income-tax that the prize money earned by the petitioner could not be taxed under the Income-tax Act, 1961. It is true that it was at a later stage that such contention was raised by the petitioner, but the said contention was a pure question of law and the Commissioner of Income-tax ought to have considered the said contention on its merits and ought not to have declined to entertain it on the ground of delay. There cannot be any estoppel against the statute, article 265 of the Constitution of India in unmistakable terms provides that no tax shall be levied or collected except by authority of law. Acquiescence cannot take away from a party the relief that he is entitled to where the tax is levied or collected without authority of law. The Constitution Bench of the Supreme Court in Amalgamated Coalfields Ltd. v. Janapada Sabha, AIR 1961 SC 964, held thus (page 965) : "It may be stated at the outset that the tax now impugned has been imposed by the local authority from March 12, 1935, and that the first occasion when its validity was att....